In alignment with Indonesia’s commitment to enhance investment certainty and regulatory transparency, the Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang (PKKPR) officially referred to in English as the Spatial Utilization Activity Suitability Approval has been established as a mandatory prerequisite for obtaining business licensing and conducting development activities across sectors.

PKKPR serves as formal approval issued by either the central government or regional authorities to verify that a proposed business or development activity is in accordance with the applicable Regional Spatial Plan (Rencana Tata Ruang Wilayah or RTRW) and the Detailed Spatial Plan (Rencana Detail Tata Ruang or RDTR).

This approval is a key requirement under the risk-based business licensing system introduced through Law Number 11 of 2020 on Job Creation and its implementing regulations. Importantly, PKKPR replaces the Location Permit (Izin Lokasi) previously required under the older licensing regime. The transition to PKKPR reflects the government’s effort to integrate spatial planning compliance into the overall investment framework in a more systematic and centralized manner.

PKKPR applies to all business actors — including domestic companies (PT), foreign direct investment companies (PT PMA), and individual investors — who seek to utilize land for commercial or industrial purposes. The approval is crucial not only for initial licensing but also for subsequent processes such as building approval (PBG), environmental permits (AMDAL/UKL-UPL), and construction commencement.

By obtaining a PKKPR, business entities demonstrate compliance with land-use regulations, minimize legal risks related to spatial violations, and secure a stronger legal foundation for long-term operational sustainability in Indonesia.

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Legal Basis of PKKPR

The regulatory framework underpinning the implementation of PKKPR (Spatial Utilization Activity Suitability Approval) is designed to enhance legal certainty and consistency in spatial planning across Indonesia. This framework is primarily governed by the following key regulations:

1. Government Regulation No. 21 of 2021 on the Implementation of Spatial Planning
   This regulation provides the substantive legal foundation for spatial planning at both the national and regional levels. It stipulates the requirement for all business and development activities to comply with designated spatial allocations, zoning plans, and land use regulations.

2. Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency (ATR/BPN) No. 13 of 2021
   This ministerial regulation outlines the technical procedures for PKKPR application, verification, issuance, and dispute resolution. It further defines roles and responsibilities of central and regional authorities in evaluating conformity with spatial plans.

3. Government Regulation No. 5 of 2021 on the Implementation of Risk-Based Business Licensing
   PKKPR is fully integrated within the Online Single Submission (OSS) system, which serves as the unified digital platform for business licensing in Indonesia. Through this regulation, PKKPR becomes one of the foundational prerequisites in the licensing workflow, especially for medium- and high-risk business activities.

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Benefits of PKKPR for Business Actors

The implementation of the PKKPR (Spatial Utilization Activity Suitability Approval) constitutes a pivotal element in Indonesia’s regulatory landscape for land use and business licensing. Introduced under the risk-based licensing regime, PKKPR is not merely a statutory requirement—it serves as a critical instrument to strengthen legal certainty, promote regulatory coherence, and accelerate the investment realization process.

For business actors, both domestic and foreign, PKKPR offers a gateway to secure land tenure, ensures spatial compatibility of business activities, and streamlines subsequent licensing procedures. By validating land use conformity with the applicable Regional Spatial Plan (RTRW) and Detailed Spatial Plan (RDTR), PKKPR mitigates potential legal risks, reduces procedural redundancies, and fosters alignment with national and regional development objectives.

Moreover, PKKPR enhances the attractiveness of Indonesia’s investment climate by providing a transparent, digitally integrated framework through the Online Single Submission (OSS) system, enabling investors to undertake due diligence and obtain regulatory approvals in a structured and time-efficient manner.

In essence, the implementation of PKKPR is instrumental in facilitating sustainable economic growth, preserving spatial integrity, and empowering businesses to operate within a clearly defined legal and developmental framework.

1. Legal Certainty
   PKKPR provides businesses with formal and documented assurance that their proposed use of land or space aligns with the designated spatial planning frameworks, including the Regional Spatial Plan (RTRW) and the Detailed Spatial Plan (RDTR). This legal confirmation:
   
2. Reduces the likelihood of zoning-related disputes;
3. Prevents the imposition of administrative sanctions, penalties, or forced relocation due to land-use violations;
4. Enhances the credibility and legal standing of the business entity in the eyes of regulators, investors, and financial institutions.

As a result, businesses are better equipped to make long-term operational and investment decisions grounded in regulatory compliance.

1. Streamlined Licensing Process
   PKKPR is seamlessly integrated into Indonesia’s Online Single Submission (OSS) Risk-Based Licensing system, serving as a foundational document for a range of subsequent permits and approvals. Upon obtaining a PKKPR, business actors benefit from accelerated processing of:
2. Environmental approvals (UKL-UPL or AMDAL);
3. Building Approval (Persetujuan Bangunan Gedung/PBG);
4. Sector-specific operational licenses tied to industry or business type.

This integration promotes a more efficient, transparent, and centralized licensing ecosystem, reducing the bureaucratic burden on business actors while improving processing times and accountability.

1. Investment Facilitation
   PKKPR plays a critical role in early-stage investment validation, ensuring that the selected land or site is suitable for business activity from a spatial and regulatory standpoint. Key advantages include:
2. Lower transaction risk during land acquisition or long-term leasing;
3. Improved investor confidence when seeking financing or forming partnerships;
4. The ability to align development timelines with certainty over site feasibility.

Both domestic companies (PT) and foreign direct investment (FDI) entities (PT PMA) stand to benefit from the clarity and predictability offered by a duly issued PKKPR.

1. Alignment with National and Regional Development Goals
   The PKKPR framework reinforces the Indonesian government’s commitment to sustainable and well-coordinated spatial development. By mandating spatial conformity, PKKPR ensures that business activities:
2. Contribute to balanced urban and rural development;
3. Support infrastructure provision aligned with public interest;
4. Prevent environmental degradation through strategic spatial allocation;
5. Advance the objectives of national priority zones, economic corridors, and special economic areas (KEK).

For businesses, this alignment enables greater synergy with public policy initiatives, increases access to government incentives, and positions them as responsible and compliant stakeholders in national development.

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Conclusion

The PKKPR (Spatial Utilization Activity Suitability Approval) represents a cornerstone of Indonesia’s risk-based licensing regime, ensuring that every business activity is spatially compliant and aligned with national and regional development strategies. By securing a PKKPR, business actors obtain legal certainty, reduce regulatory exposure, and gain early validation of land use—critical for long-term investment planning and operational continuity.

Through its integration with the OSS system and its linkage to other essential permits such as environmental approvals and building permits, PKKPR simplifies the licensing process while enhancing regulatory transparency. More importantly, it facilitates responsible development that contributes to sustainable growth and spatial order.

For new business entities or existing companies seeking to expand their operations, obtaining a PKKPR is not only a legal obligation but also a strategic step toward ensuring full compliance and securing a solid foundation for investment.

If you wish to better understand your company’s eligibility or require assistance with the PKKPR application process, ET Consultant is ready to assist you. Our team provides end-to-end advisory and submission services for both PKKPR and related licensing components, ensuring a smooth and legally compliant entry into Indonesia’s dynamic business environment.

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ET Consultant is a Business Consultant and Legal Consultant Expert that provides support for local and multinational clients to start and manage their business operations in Indonesia. ET Consultant specializes in Business Incorporation, Licensing & Legal, Accounting & Taxes, Immigration, and Advisory Services.

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